At Gamefest, Microsoft has announced that they will be releasing a new update this holiday season for their Games for Windows Live development tools allowing developers to put their Xbox Live Arcade titles on the PC. There’s no word yet on which games will be available, how it will work, or if already-purchased XBLA titles will require a second purchase to play on your PC. (Looking at Geometry Wars as an example, though, it doesn’t look good.)Hopefully with GFW Live reportedly coming to XP later this year Vista won’t be required to play the Arcade titles. But until Microsoft reveals more information, that’s part of the gigantic list of unknowns surrounding this latest announcement, and it’s safest to assume you will need everyone’s favorite OS: Vista.

Stay tuned for more updates as Microsoft gives them. I’m curious to find out how they plan to convince gamers to spend money on arcade titles when there’s a plethora of free flash games out there, as well as Steam.